Real Estate Information Archive

Blog

After many years of saving up for a down payment, you may now be in a position to buy a new house. Before you can do that, there are some things that you need to be aware of when figuring out what you can qualify for, such as negative equity or the decline in the supply of inventory. According to Steve Cook, managing editor of Real Estate Economy Watch, the year began with inventories only 2% above where they were a year ago. To help determine whether or not 2014 is a good time for you to sell your home, you should always contact a local real estate professional to assist you. Additionally, your equity and your credit scores affect what you qualify for when it comes to a mortgage.

First, it is crucial that you understand the meaning of what negative equity is before any action can be taken. According to Investopedia.com, negative equity is when the value of an asset falls below the outstanding balance on the loan used to purchase that asset. Being in negative equity may have some consequences attached; however, it is never too late to fix the problem and move forward from it. A real estate professional is very knowledgeable about the ins and outs of their business and it is their job to assist you with any kind of issue that you may be faced with, including your equity. Agents are valuable resources that can provide you with the most accurate information about how to correct the problems and take the proper action. If you are unsure if the equity of your current home is negative, a Home Equity Calculator could be useful, providing you with the exact value of your home and where you need to go from there.

One of the best ways you can reduce your new monthly mortgage is to improve your credit score before the process actually begins. In addition to paying your bills on time, be sure to reduce your debts (especially those with high-interest rates) and keep unused lines of credit open. All of these strategies can improve your score and allow you to qualify for the best mortgage interest rates available. You can check your credit score on a site like AnnualCreditReport.com a few times a year to keep track of any areas of concern or improvements.

Making the decision to move to a new home and figuring out how to sell your current one can be a challenge. The good news is that you do not have to go through the process alone. There are plenty of real estate agents that are patiently waiting for your call. For additional questions, comments, or concerns, connect with Don Roth at 717-579-2879 or email donroth@earthlink.com

Much of the country is looking at one more very big bite of winter before spring officially begins, but for the residential real estate market, spring is already underway—and new home buyers are sprouting everywhere.

Job creation so far this year is 30% stronger than in the same period last year. Unemployment is close to a low of more than nine years. Wages and income are also starting to pick up to growth levels we haven’t seen since 2009.

And with more money in their bank accounts, consumers are feeling a boost in confidence that leads to big purchases … like homes! This year’s economic growth gives them another reason to buy sooner rather than later because stronger economic growth also means higher interest rates.

January and February saw rates in line with what we saw at the end of 2016. But in the last two weeks, we’ve seen the average rate for a 30-year conforming mortgage increase by almost a quarter of a point. That’s because the market is expecting the Federal Reserve to raise short-term rates when the board of governors meets this week.

Mortgage rates will likely stay close to this level until we hear more about additional rate increases later this year. The expectation is for three increases this year. If economic data continue to show growth in inflation and wages, those three increases could actually become four.

This means that rates will continue to rise—we’re more likely to see a movement of 10-25 basis points in one- to two-week spurts, as new data and new comments from the Fed indicate rate policy changes are imminent. Those spurts will likely be followed by weeks with little change in rates.

The upside of higher rates is that it is getting easier to get a mortgage. The most widely followed measure of mortgage credit access from the Mortgage Bankers Association indicates that access has expanded 6.5% since September.

Arguably the biggest challenge to buyers this spring will be simply finding a home to buy and getting it successfully under contract. That’s because the supply of homes for sale is at an all-time low, and yet demand is strong and getting stronger.

We started the year with the lowest inventory of homes available for sale that we’ve ever seen on realtor.com. While we did see inventory grow 2% in February, total inventory was down 11% over last year.

Low inventory and strong supply are leading to inventory moving faster and faster as measured by median days on market. The median number of days on market in February was 90 days, six days less than last year. We also saw 27% of all listings selling in less than 30 days. Last year, we saw that happen in mid- to late March, so this year’s timetable is about three weeks ahead.

The early birds who decided to buy in the winter faced less competition and enjoyed lower rates than we are seeing now. It gets more expensive and more competitive going forward, but the early(ish) buyer, at this point, is still likely to come out on top, when you consider that prices and rates are likely to be much higher later in the year.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

While it's an illegal breach of privacy for real estate agents or mortgage originators to sell your credit information, it is perfectly legal for credit companies to do so. For a price ranging anywhere from $25 to $100, your name and certain specifics about your credit report - including your address, phone number, mortgage history, and even your FICO score range - are sold by the credit bureaus to mortgage companies. The result is an onslaught of unsolicited phone calls and junk mail as soon as you apply for a home loan.

Unfortunately, no legislation exists to prevent credit bureaus from profiting at your expense. As a "trigger lead", you are simply at the mercy of any number of marketing campaigns designed specifically to discredit the mortgage professional you've come to know and trust.

That's why, prior to applying for any loan program, I suggest that you visit www.optoutprescreen.comto opt-out of future credit bureau solicitations and avoid this problem altogether. Not only will you avoid the hassle of telemarketers, but by opting out you could potentially add 10 to 15 points to your credit score!

In addition, if you do happen to receive phone calls from solicitors, ask them to place your name and number on their Do Not Call list. All telemarketing companies have their own internal Do Not Call list that they must abide by. Be sure to take down the name of both the company and the individual who made the call, and to let the solicitor know that you're doing so. This way, you will have grounds to seek action against them, should they call again.

As you embark on what is likely the largest financial transaction of your life, you should place yourself in the hands of a professional - not some transactional loan officer who purchased your information from the credit bureaus. Remember, only a limited number of sources exist for lenders to obtain mortgage money, so it's extremely unlikely that a borrower will find an unbelievably low rate without an unbelievably high cost.

If, however, you are curious about the programs these mortgage companies have to offer, then listen to what they have to say. Once they've offered you a rate that seems too good to be true, ask them a question or two from the following list.

1.

Where did you get my information? Who gave you permission to call me, and how much did you pay for my information?

By asking this series of straightforward questions, you demonstrate that you're not an uninformed or unsuspecting mortgage applicant who can be easily victimized.

2.

Why should I be willing to speak with you when you weren't referred to me by someone I trust?

This question demonstrates that you're interested in a long-term relationship with a trusted advisor.

3.

How are mortgage interest rates determined, and what impacts the rates that you are offering me today?

Many unprofessional and uninformed individuals believe that home loan rates are based on the 10-Year Treasury Note. This, however, is not true. Mortgage interest rates are actually based on mortgage-backed securities or mortgage bonds. In fact, many times these securities trade in opposite directions, and anyone who's looking at Treasury Notes to determine the lock on your loan will provide you with inaccurate information.

Asking this question will demonstrate that you're aware of the fact that mortgage rates can change frequently, even hourly, depending on economic news and market volatility. If they can’t share this information with you, what else might they be leaving out?

4.

What impact does the Federal Reserve have on the rate I will be paying for my first mortgage with you?

The answer here is that it does not. The interest rate that you pay is impacted by the bonds and securities markets. When the Fed changes short term rates, the "Fed Funds Rate" or the "Discount Rate", only rates for items such as Home Equity Lines of Credit (HELOCs), credit cards, and other similar loans are directly impacted.

5.

What are the specific closing costs associated with the rate and program you're offering me today?

Many times, interest rates will be quoted with origination fees or discount points included in order to deliver the attractive interest rate being offered. While in some cases your situation may warrant paying these fees to get a better rate, you should always be made aware of these fees and options up front. Also, be aware of any fees disguised as a "Funding Fee." In some cases, these fees have been hidden in order to deliver what seems like an exceptionally low rate with "no points or fees."

If you have any questions about this, or any other part of the mortgage process, please call me.I'll be happy to assist you in any way I can.

Ah, August. This hectic month is jam-packed with back-to-school obligations and last-minute barbecue invitations. But did you know it’s also a great time to save some cash?

Sure, school supplies are on sale this month, but August is full of awesome deals for the home, too!

Here are five things you can buy on the cheap this month:

1. Outdoor gear. Stores make it a high priority to get rid of outdoor gear before the temperatures drop, and this includes everything from patio furniture to grills to lawn mowers.Tip: It’s best to wait until the end of August to purchase outdoor furniture. Retailers like Sears and Home Depot will discount patio sets by as much as 90 percent!

2. Storage containers. Stores tend to cater to the new college crowd during August. That means they’ll mark down the value of dorm supplies, especially storage containers and organizers. In the market for some new under-the-bed storage drawers or maybe some space-saving bins for your bathroom? Now is the time to buy.

3. Linens. If you’re looking to restock your linen closet, August is the best time to do it! Not only are college kids shopping for new bed linens, many shops are also trying to purge their summer sheets to make room for heavier fall and winter gear. You can expect to find linens, duvets, pillows and blankets at a discount price.

4. Kids clothing. If your little one’s jeans have seen one-too-many grass stains this summer, jump on the back-to-school bandwagon! Clothing retailers have widespread sales on kids clothing during August with markdowns as much as 40-70 percent off!

5. Office supplies. They may be under the label of “school supplies,” but don’t be fooled! Grown-ups need pens and pencils, too. If you have a home office (or just need some new envelopes) stock up on these supplies while you can. Tip: Need a new desk for your home office? Computer desks often fall into the “dorm items” category, so they’ll be cheaper this month, too.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Federal Reserve Chair Janet Yellen again addressed the question of the Fed and interest rates earlier this week. This go around Yellen suggested that an interest-rate hike was in the cards for later this year. We say “suggested,” because as usual Yellen made any rate hike conditional: When the economy can support a rate hike, in the Fed's opinion, then we will see a rate hike.

To be sure, a rate hike could be in the cards (though we remain skeptical), but it really doesn't matter. Interest rates have been rising with or without the Fed's imprimatur.

The yield on the very influential 10-year U.S. Treasury note seems intent on hanging above 2.35%. This, after it was hanging around 1.9% as recently as April. Mortgage rates, in turn, also seem intent on hanging around at a higher level. The 30-year fixed-rate loan continues to creep progressively higher. It's now comfortably above 4%. The 15-year fixed-rate loan has followed a similar trajectory. As the yield on the 10-year note goes, so goes longer-term mortgage rates.

The fact is that mortgages rates have moved higher without any prompting by the Fed. This point is worth underscoring. Many borrowers believe low mortgage rates will remain as long as the Fed continues to procrastinate on its first rate hike in nearly a decade. This is untrue. Interest rates in general and mortgage rates in particular can rise without any input from the Fed, as we've seen in recent months.

Nevertheless, many borrowers believe time is on their side. Until the Fed announces a rate hike, low rates are here to stay. That's a dangerous mindset, because there is nothing to stop credit markets from supplanting low interest rates with high interest rates. What's more, there is nothing to stop the market supplanting rates much quicker than most people expect.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Housing matters, and it matters more than most people realize. Yes, money is made on every sale, because sales directly generate commissions and lending fees. Of course, there is so much more to it than that.

Housing has a powerful cascading effect. National Association of Home Builder data show that residential investment averages 5% of gross domestic product (GDP). That's a lot of economic activity when you consider that 5% of $17 trillion is $340 billion. When ancillary services and goods – remodeling, furnishings, appliances, maintenance, improvements, etc. – are factored in, the percentage rises exponentially. The NAHB puts the percentage of total contribution at roughly 17% of GDP. Seventeen percent of $17 trillion is $2.9 billion.

To be sure, existing homes generate more sales transactions and more ancillary demand in aggregate. But new homes provide the biggest GDP bang for the buck. That's why we are always encouraged to read good news on new homes.

The news on home-builder sentiment is certainly good. The Wells Fargo/NAHB Home Builder Sentiment Index continues to hover near a multi-year high. The index remained unchanged at 60 for July. This is the strongest level since November 2005 and signals sustained strength for the new-home market.

Mortgage activity also supports a bullish outlook. Purchase mortgages for new homes continue to trend higher. The latest survey from the Mortgage Bankers Association shows new-home purchase activity was up 1% in June. Year over year, new-home purchase lending is up 8%.

So, housing is looking very stout at the mid-point of 2015. This really isn't a surprise. A strengthening housing market was one of our January prognostications for 2015. At this point, it's just a matter of waiting for the rest of the economy to catch up with housing.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

All-cash buyers continue to retreat into the background. RealtyTrac reports that all-cash purchases dropped to 24.6% of all single-family and condo sales in May. This is down from 28.5% in April. As recently as February 2011, all-cash purchases accounted for over 42% of all sales.

A normal, stable home market is driven by owner-occupied buyers. An owner-occupied market is a market where buyers look to a house as a home, not as a profit center. Stability and predictability rein in such a market.

Stability and predictability extend to price appreciation, which should return to a normalized historical rate in more markets. Normalized price appreciation, in turn, should generate more inventory, particularly for young and first-time buyers. Most investment properties are taken from starter-home inventory. The trend to more owner-occupied buyers is good news for young people entering the market.

We're not disparaging investment buyers. They were vital to the recovery. Without someone – mostly investors – to halt the slide, we'd be a few years behind in the progress we've made to date. That said, normalcy needs to eventually take over to sustain the market. Fortunately, normalcy has taken over in 2015.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Living near a high-scoring school can increase your home’s value by over $200,000, according to the Brookings Institute. That’s not chump change! And while some argue that the correlation between home prices and school systems is not linear – it’s a chicken-or-egg argument – there are plenty of attractive advantages that come with proximity to a school, including increased police protection, personal use of school facilities and living in a “Drug Free School Zone.”

"Even those couples who don't have kids yet, but are planning to, are worried about the quality of schools in the neighborhoods where they are considering buying. My advice is to check out greatschools.org-- and look not only at test scores but parent reviews, special programs that the school might offer, and also which alternative schools are in the area, including charter and private options. High-scoring or popular schools do raise property values and demand for homes, no question," said Stacie Staub, Live Urban Real Estate.

Sounds great, right? Not so fast. Living by a high-scoring school sounds like a no-brainer, until you realize that a school means kids. And kids are unpredictable. And teenagers? Teenagers can mean havoc on your lawn, commute and sleep cycle.

“My wife I are were so excited to move into our first home,” said Ron, a new homeowner and BrightNest member from Boulder. “We were also pumped about the track at the high school right next to our home. I love to run and couldn’t wait to take advantage of it. We bought our house during the summer and all was good. But then when school started, we realized what a mistake we made. Traffic was insane all hours of the day and night, you can tell that the drivers have only had licenses for a year and band practice is now my worst enemy.”

"Living near an elementary school is fine; all you deal with is a bell sounding about every 45 minutes, school bus traffic and the line of parents picking and dropping off. Middle and high schools, though, can be a nuisance most of the year. Older kids can act out, vandalize, drink, smoke pot and more. It may be good to be close to a school if your child attends, but after that short period of time, I tell my clients that they may have regrets," Neil from 360 Dwellings Real Estate said.

While home value is something to consider because homeownership is an investment, it’s equally important to consider the reality of living in your property.

"I would give the same advice to someone looking to buy a home adjacent to a middle or high school the same advice I would give someone thinking about buying next to a church or meeting hall...there will be times when traffic is increased, noise levels might rise, and street parking might be more difficult to find, but the rest of the time the building is quiet and usually very well maintained -- not the worst thing to have as a neighbor!" said Staub.

Neil adds, "I tell my clients that if they're going to sell, they should list in the summer when school is out. Know though, that when you sell your buyer pool is also limited since most buyers do not have kids in that exact age bracket and don't want to live near a school. So it may be tougher to sell than a comparable home that is farther from a middle or high school."

Before You Buy:

Know that real estate agents cannot comment on the perceived quality or differences of schools and neighborhoods, because they will be violating equal treatment and anti-discrimination laws. So, do not expect your real estate agent to be candid about how the school can negatively impact both your home’s value and the quality of life in the neighborhood.

Visit the property at multiple times during the day. What is it like at 7:30 AM on a Monday? What about 3:30 PM on a Friday?

Check out the neighborhood’s crime statistics. Is there a spike in vandalism? That may be related to the proximity to a high school or middle school.

Knock on doors. Neighbors of your prospective home will be the best way to get accurate information about how the proximity to the school may affect your quality of life.

If you are hoping to find a home that you can easily sell, you should consider buying farther away from a middle or high school.

​Bottom Line: If the home you’re interested is near a high-scoring elementary school, you’ll get the benefits without the hassle. We say, go for it. But, if your dream home backs up to a middle or high school, it’s worth weighting the benefits against the cost before you sign on the dotted line.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

HouseLogic.com has an informative article to help home buyers with their house hunt. Take a look...

House hunting is just like any other shopping expedition. If you identify exactly what you want and do some research, you’ll zoom in on the home you want at the best price. These eight tips will guide you through a smart homebuying process.

1. Know thyself.

Understand the type of home that suits your personality. Do you prefer a new or existing home? A ranch or a multistory home? If you’re leaning toward a fixer-upper, are you truly handy, or will you need to budget for contractors?

2. Research before you look.

List the features you most want in a home and identify which are necessities and which are extras. Identify three to four neighborhoods you’d like to live in based on commute time, schools, recreation, crime, and price. Then hop onto REALTOR.com to get a feel for the homes available in your price range in your favorite neighborhoods. Use the results to prioritize your wants and needs so you can add in and weed out properties from the inventory you’d like to view.

3. Get your finances in order.

Generally, lenders say you can afford a home priced two to three times your gross income. Create a budget so you know how much you’re comfortable spending each month on housing. Don’t wait until you’ve found a home and made an offer to investigate financing.

Gather your financial records and meet with a lender to get a prequalification letter spelling out how much you’re eligible to borrow. The lender won’t necessarily consider the extra fees you’ll pay when you purchase or your plans to begin a family or purchase a new car, so shop in a price range you’re comfortable with. Also, presenting an offer contingent on financing will make your bid less attractive to sellers.

4. Set a moving timeline.

Do you have blemishes on your credit that will take time to clear up? If you already own, have you sold your current home? If not, you’ll need to factor in the time needed to sell. If you rent, when is your lease up? Do you expect interest rates to jump anytime soon? All these factors will affect your buying, closing, and moving timelines.

5. Think long term.

Your future plans may dictate the type of home you’ll buy. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in the home for five to 10 years? With a starter, you may need to adjust your expectations. If you plan to nest, be sure your priority list helps you identify a home you’ll still love years from now.

6. Work with a REALTOR®.

Ask people you trust for referrals to a real estate professional they trust. Interview agents to determine which have expertise in the neighborhoods and type of homes you’re interested in. Because homebuying triggers many emotions, consider whether an agent’s style meshes with your personality.

Also ask if the agent specializes in buyer representation. Unlike listing agents, whose first duty is to the seller, buyers’ reps work only for you even though they’re typically paid by the seller. Finally, check whether agents are REALTORS®, which means they’re members of the NATIONAL ASSOCIATION OF REALTORS®. NAR has been a champion of homeownership rights for more than a century.

7. Be realistic.

It’s OK to be picky about the home and neighborhood you want, but don’t be close-minded, unrealistic, or blinded by minor imperfections. If you insist on living in a cul-de-sac, you may miss out on great homes on streets that are just as quiet and secluded.

On the flip side, don’t be so swayed by a “wow” feature that you forget about other issues -- like noise levels -- that can have a big impact on your quality of life. Use your priority list to evaluate each property, remembering there’s no such thing as the perfect home.

8. Limit the opinions you solicit.

It’s natural to seek reassurance when making a big financial decision. But you know that saying about too many cooks in the kitchen. If you need a second opinion, select one or two people. But remain true to your list of wants and needs so the final decision is based on criteria you’ve identified as important.

I just read an article that said the average monthly rental payment in the Harrisburg area was $846 in 2013. Since this report says they calculate that number every two years, I made the adjustment to $900 per month. So using this number and rounding down to consider a 3.75% 30 fixed mortgage rate you arrive at a monthly principal and interest payment of $879.92. Amazing how close that figure is to the average monthly rental payment, wouldn’t you agree? Yes, I am aware that the mortgage payment does not include real estate taxes and insurance but I wanted to give you a reference point to consider. Included below are a few pictures of homes that fall into this affordability price range.

You probably are asking why I am posting this article now? Well, we have all been saying that interest rates are going to increase by the end of 2015. AND yes we have made that prediction before and nothing has happened and I am not saying this is different than previous times but it is. So if you are paying this amount of money in rent at least consider the alternative, talk to a lender and see what your options are. Or give me a call and we can look at some homes, just like you take a car for a test drive. If you don’t like anything at least you know that home ownership is not for you at this time. Give me a call or text me at 717-579-2879 or send me an email at Don@DonRoth.com. I am happy to assist you !